Inheritance Tax and the IHT400 form — the basics
Where a link is marked *, it is a partner link — we receive commission at no extra cost to you. Links without a * earn us nothing. How we make money.
In short. UK Inheritance Tax is charged at 40% on the value of an estate above the £325,000 Nil-Rate Band. An extra Residence Nil-Rate Band of up to £175,000 applies where the family home passes to direct descendants. Both thresholds are frozen until April 2030. Inheritance Tax is due within 6 months of the end of the month of death; IHT400 is the full account most estates above the threshold use.
Around 5% of UK estates pay Inheritance Tax in a given year (HMRC statistics). Couples can transfer unused thresholds — a married couple or civil partnership can pass up to £1m to direct descendants tax-free where the home is involved.
Last reviewed: Next review by: 3 min read
Thresholds for 2025/26
- Nil-Rate Band — £325,000
- Residence Nil-Rate Band — up to £175,000 (where the home passes to direct descendants)
- Both frozen until 5 April 2030
- Residence Nil-Rate Band tapers by £1 for every £2 above £2m of estate value
- Transferable: a surviving spouse/civil partner can use 100% of any unused threshold from the first death
When IHT400 is needed
IHT400 is the full Inheritance Tax account. It is required where the estate has any IHT to pay, where the estate exceeds the available thresholds, or where the deceased made certain lifetime gifts within 7 years of death.
Many smaller estates qualify as 'excepted estates' and only need basic figures on the probate application (PA1P/PA1A in England & Wales) — no IHT400 at all. Excepted-estate limits were widened in January 2022.
Deadlines and payment
- Pay any IHT within 6 months of the end of the month of death — interest accrues after that date at Bank Rate + 4 pp
- File IHT400 within 12 months of the end of the month of death
- IHT on certain assets (e.g. land, controlling shareholdings) can be paid by 10 annual instalments — interest still accrues
- HMRC's Direct Payment Scheme lets banks pay IHT direct to HMRC from the deceased's accounts before probate is issued
FAQ
- Do I have to use a solicitor for probate?
- No — the HMCTS online probate service is designed to be usable by personal representatives directly. Solicitors tend to be used in larger or contested estates, where IHT is significant, or where the will is complex.
- How much does probate cost?
- The court fee is £300 for estates over £5,000 (no fee below that), plus £1.50 per extra copy of the Grant. Solicitor fees vary widely and are typically charged hourly or as a percentage of the estate.
- Are gifts before death taxable?
- Gifts made in the 7 years before death may be added back into the estate for IHT (with taper relief between years 3 and 7). Small gifts (up to £250 per person, £3,000 annual exemption, normal expenditure out of income) are exempt.